When the price of the chip decreases, 5G extends to many affordable phones

With the advent of 5G cheaper phones, faster mobile service will make it affordable for low-income consumers around the world, market researchers say.

The key to this wide range of 5G service is the low cost of special semiconductors required for 5G phones, which analysts expect to continue over the next two years. Putting low-cost chips into different phones makes it economically viable.

Already, 5G technology has moved beyond the premium smartphone market, with mid-range devices selling for $ 550 and up to $ 250- $ 550, and even cheaper 5G phones in some areas, said research director Jeff Feldhak. At Counterpoint Research.

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5G technology is declining at a faster rate than the previous generation, said Frank Bolben, Verizon Communications Inc.’s Consumer Group Revenue Manager. Counterpoint Vice President of Research Neil Shah said that giving priority to 5G chips in chip makers in China and Taiwan in Asia is leading to lower chip prices and budget-friendly 5G devices.

The average price of a multi-functioning 5G system: the so-called chip is now between $ 40 and $ 45, Counterpoint said. That price could reach $ 20 later this year or early next year, which would be economically viable if many mobile phone makers put 5G chips on retail for $ 150, he said.

After Verizon and AT&T agreed to limit the signal around US airports, airlines canceled some flights before launching a new 5G wireless service. The wireless industry has rejected the FAA’s claim that the service could affect aircraft safety systems. Photo: Justin Lane / Shutterstock

US Consumer Cellular Inc. Greg Hughes, vice president of the company’s portfolio strategy, expects the 5G phone to be priced at $ 199 and a premium 5G phone early next year. The company currently offers 5G phones worth $ 349 and up. Mr Hughes said he expects consumer access to low-end smartphones to increase 5G.

Globally, 5G capacity will reach at least 80% for phones priced at less than $ 200 in the next two to three years, with less than 5% being distributed, said Runar Bjorhovde, a research analyst at Canalis Market Research.

Overall, by 2021, 42% of smartphones sent to retailers worldwide will have 5G capacity, according to Counterpoint. That percentage is expected to rise to 54% this year and 66% next year, says Counterpoint. Last year, 58% of smartphones sent to retailers in the US had a 5G capacity, and that percentage is expected to grow by 83% by the end of this year and 89% by the end of 2023, according to Counterpoint.

Mr. Bhattacharya is a reporter for the Wall Street Journal in Philadelphia. It can be reached at suman.bhattacharyya@wsj.com.

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